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Sterling v. Taylor

Supreme Court of California
152 P.3d 420 (2007)


Donald Sterling (plaintiff) sought to purchase three apartment buildings from the Santa Monica Collection partnership, of which Lawrence Taylor (defendant) was a general partner. On March 13, 2000, Sterling drafted a memorandum identifying the three apartment buildings and stating a price term of “approx. 10.468 X gross income[,] estimated income 1.600.000, Price $16,750.00.” The price term in the memorandum contained a clerical error and was intended by both parties to read $16,750,000.00. Only Sterling initialed the memorandum. On March 15, 2000, Sterling wrote a letter to Taylor discussing deposits he had made and discussing other aspects of the sale. The letter did not mention the price term. Both parties signed this letter. On April 4, 2000, Taylor sent Sterling formal purchase agreements indicating an aggregate price term of $16,750,000.00. Sterling refused to sign because, after reviewing the rent rolls, he had found that the actual rental income of the apartment buildings was $1,375,404.00, rather than the $1,600,000.00 estimated in the memorandum. Pursuant to the formula contained in the memorandum, Sterling multiplied the actual rental income by 10.468, resulting in a purchase price of $14,404,841.00. Taylor refused to lower the purchase price. In March 2001, Sterling sued for breach of contract. Taylor moved for summary judgment, claiming that the alleged contract violated the statute of frauds because the price term was too uncertain. The trial court granted summary judgment. The Court of Appeals reversed, finding that extrinsic evidence sufficiently clarified the price term. Taylor appealed.

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